IP Rights and Contracts after 1 January 2021. Time to Prepare
The UK left the EU on 31st January 2020. We are now in a transition period and for most businesses things will look and be the same as they have been. But don’t relax just yet. Just when you thought it was safe to take a step back from the turmoil of the last year we are encouraging business to start planning now for the new legal landscape that will apply from 1 January 2021.
The Withdrawal Agreement agreed between the UK and EU last October sets out the detail on what will happen with respect of Intellectual Property Rights from the 1st of January 2021. In addition the mere fact that we are no longer part of the EU will have an impact on the way in which we deal with other businesses. This means that all businesses that have IP and use it in their business or licence it for use by others should do some ‘under bonnet checks’ now to prepare themselves for the changes to come. At Briffa we are recommending businesses look at both their intellectual property portfolios and their contacts with others to check that what they have registered and what they have agreed in contacts will be fit for purpose come 1 January 2021. Here are some tips on what to look for and what may need some tweaking:-
- If you have or are licensing an EU registered trade mark, you will automatically be granted an equivalent right in the UK come 1 January 2021. If your mark is only pending as of 1 January 2021 however you will need to apply for the equivalent mark in the UK by making your application within 9 months of 1st January 2021, i.e. by the 30th of September 2021.
- If you have a registered Community Design you will be granted an equivalent right in the UK on 1 January 2021. The criteria for securing registered design rights is time sensitive and we are advising all business filling new designs to file in the UK first and then extend the right as required under International Convention.
- If you have granted a licence to a trading partner for the whole of the EU, consider clarifying this, including the UK if that is the intention.
- If you have set an EU wide target for sale or payment of royalties consider whether you need to revisit and adjust for a specific UK only target. It follows if you are dealing with an exclusive licence and targets that the provision relating to termination for failure to perform may also need adjusting.
- Regarding prices and price reviews, do you need flexibility to account for tariffs that may be imposed reduced or removed.
- Where will disputes be settled? While currently there is legislation in place easing the recognition of court judgments made in one member state of the EU in another member state it cannot be guaranteed that this will continue. For that reason it would be worthwhile to look at the dispute resolution regime provided for in a contract and check that it will suit the business going forward.
- Will there be a separate UK and EU regulatory regime for the products and services under licence that a licensee will be obliged to follow? If so this should be spelt out
- Apart from preparing to weather price changes as suggested in 5 above are there any other more major changes that would make the agreement uneconomical. For example, does your licensee need some other licence of authority itself to operate in the EU. If so and authority cannot be secured, you may consider making it a ground on which you can terminate the contract in the event that such conditions are not fulfilled.
Time spent now checking your position and preparing will be well invested. From the above it is clear that much can be some to smooth the transition and avoid problems arising.
For more information on how we can assist, please email [email protected].
Written by Margaret Briffa